Whistle-blowers to split $84 million from Abbott Labs

Thursday

May 10, 2012 at 12:01 AMMay 10, 2012 at 11:51 AM

It pays to blow the whistle on bad actors. Four former Abbott Laboratories sales staff members who tipped off authorities to improper marketing of medication will split $84 million. It's part of a $1.6 billion settlement Abbott said this week it would pay to resolve federal and state claims.

Tim Feran, The Columbus Dispatch

It pays to blow the whistle on bad actors.

Four former Abbott Laboratories sales staff members who tipped off authorities to improper marketing of medication will split $84 million.

It’s part of a $1.6 billion settlement Abbott said this week it would pay to resolve federal and state claims.

An attorney for the whistle-blowers would not reveal their identities but said none is from Ohio.

“The amount of money should send to other whistle-blowers the message that if they’re willing to take a risk, they have the potential to be compensated,” said the attorney, Reuben Guttman, with Grant & Eisenhofer of Delaware state.

The payout is considered the second largest since the False Claims Act was revised in 1986, giving whistle-blowers more financial incentive to come forward by awarding them part of the settlement. In 2009, Pfizer Inc. paid $2.3 billion to settle a similar case, and six whistle-blowers reaped a total of $102 million.

“We’ve been made aware of cases we may not have been made aware of previously,” said Charles Miller, a spokesman for the U.S. Department of Justice’s Civil Division, which was involved in the Abbott case. Previously, “outside of being a good citizen and possibly losing their jobs, nothing else there would result for a whistle-blower. The whole point when the law was revised in 1986 was to give an incentive to individuals to blow the whistle.”

Ohio Attorney General Mike DeWine announced his support last year for a state False Claims Act — or “whistle-blower protection law” — that would encourage informants to come forward.

Ohio doesn’t have such a law.

Senate Bill 143, which would give Ohio an increased share of settlements and whistle-blowers a portion of recoveries, is before the Ohio Senate Judiciary Committee on Civil Justice.

“Many states have their own false-claims act,” said Richard Blake, an attorney at the law firm Bricker & Eckler who often deals with such cases. “There will be instances where the federal government decides not to intervene or where there are not significant federal funds involved.

“It is the most powerful tool in the government’s arsenal today.”

Guttman was also part of the Pfizer settlement, and he didn’t think that settlement could ever be duplicated or approached.

“As the wrongdoing gets more aggressive, the recoveries will get larger. We live in a time where (U.S.) Attorney General (Eric) Holder projects that Medicare and Medicaid fraud will reach $60 billion.

“As we spend more money on health care ... there will be companies trying to figure out how to game the system. Unfortunately, we’re now in an environment where marketing is winning out over medical care in decision-making. Obviously, that’s a real concern.”

The gaming of the system, however, can go both ways, Blake said.

“These recent cases have spawned a cottage industry,” he said. “There are instances where we’ve found (whistle-blowers) who go looking for weaknesses in organizations. They get themselves hired and then file a complaint. It is extremely lucrative for plaintiff counsel.”

Whether the money is paid to the government, the whistle-blowers or the attorneys, it likely will be overshadowed by the fallout from patients who have been improperly treated, Guttman said.

Abbott made the payment to settle claims that it improperly marketed the neurologic medication Depakote for off-label, or unapproved, uses. Abbott will pay $800 million to resolve civil allegations split among federal and state governments and $700 million in criminal penalties. It also will pay $100 million to states to resolve consumer-protection matters, the North Chicago-based company said.

Ohio will receive a combined $14.5 million from the settlements. Abbott’s Columbus operations, which employ about 2,000, are focused on nutritional products and are not involved in the case.

tferan@dispatch.com

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